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VAT is Just Another Tax

There is a 1980s song called Little Red Corvette from the rock musician formerly known as Prince. And no, it is not about a sports car. Rockologists claim that the song title refers to a vagina.

Now Democrat House speaker Nancy Pelosi is talking about a thing called a VAT or Value Added Tax. And her Little Red Cor-VAT is just as sneaky as Prince’s. Or so she thinks. VAT is a way of taxing people, ostensibly without their knowledge. Except that Americans are hip to Pelosi and her party and know exactly what the VAT means.

VAT is a process used in Europe (where else…?) of adding a tax to a product at every stage of production. It works like this: The farmer pays a small VAT tax on his corn-growing; then the processor pays a small VAT tax on making the corn into flakes; and then the trucking company pays a small VAT on the fuel it uses to get the corn flakes to market; and then the supermarket pays a small VAT on its sale of the flakes. Each contribution is small, but pretty soon you are talking about real money, like hundreds of billions of dollars over the entire economy. And pretty soon a box of corn flakes costs $6 and we’re not supposed to know why. And the difference between the old market price of $4 and the new price of $6 all ends up in the pockets of the government.

Why are Pelosi and other Democrats proposing a VAT in the first place? Because you don’t magically insure millions of people for their health without paying for it. And since many of these uninsured cannot afford to pay their own way, those who have wealth are going to be taxed to pay for them. And since Obama said that he was not going to raise taxes on the middle class, he can use the VAT and say that he just doesn’t understand why a box of corn flakes costs $6. And then he will appoint a Corn Flakes Czar to find out why this is happening.

Pelosi says that the VAT would help to level the playing field between US and foreign manufacturers who do not have the cost of health care included in their prices because the government pays for health care in many countries. Of course in Voodoo English – the languages of Pelosi – she ignores the obvious, that a tax is a tax is a tax, and that all those Euro-insured are paying in one way or three for their “free” health care, and sinking their economies with such levies.

Hey Nancy, your popularity is not 11% for nothing…

So here is a congressperson who thinks we need to have a sneaky stealth tax in order to increase taxes, but who wants nothing of the sort when it comes to collecting all the other federal taxes that we already pay.

What does that mean?

It means this: For decades now conservatives and other sound-minded economists have been arguing for one of two new ways to collect our federal taxes to replace the abhorrent Internal Revenue Service and its leviathan tax code: The proposals are:

*A Flat Tax, in which a filer simply takes his annual income, multiplies it by a mandated percentage rate and sends a check to the government. In other words, rather than sweating out your 1040s and 1099s and all the rest from January 1 to April 15 and spending thousands on an accountant and figuring out all those little boxes in the 60,000-page federal tax code, you just take your income (say $50,000), multiply it by the rate (say 15%) and send the government $7,500. Simple. Taxes done in two minutes. Russia has adopted a 17% flat tax and it has proven to be a huge boost to its economy, and to all the other global economies that have adopted it. Because it simplifies the system. And simplification is a good thing.

*The other option is a National Sales Tax (NST) in which every item you buy has a federal tax on it like a state sales tax. This also has been called the Fair Tax. So under NST, you pay your taxes when you buy stuff and don’t need to fill out any forms for April 15.

Of course, the first impulse is to reject the NST as “another tax”. But like the Flat Tax, a National Sales Tax would replace your IRS tax forms which would be a huge simplification. No more payments to lawyers and accountants, no more IRS, no more government harassment, no more all-nighters with the calculator and the instruction book.

In fact, both NST and the Flat Tax are much like the VAT – they are automatic. But the Flat Tax and the NST are intended to replace the existing tax system, while Pelosi’s VAT is another tax on top of the horrendous IRS-based system we have now.

So in other words, Pelosi has no interest in relieving the American people of IRS tyranny with a Flat Tax or a National Sales Tax or even a VAT. Because the existing system is an oppressive force that liberals use to threaten, harass and intimidate Americans, which is what liberals love to do. She wishes to maintain the current system and then add to it with a VAT so that we all can pay our much higher taxes without thinking about it, or filling out any forms.

How sneaky…

Americans had better get used to the fact that president Obama’s health-care plan is going to need nothing more than a huge tax increase and eventually, government takeover of the health-care system. Yet we can fix the current system by restraining the trial lawyers and the health-care unions (both Democrat) and by restraining the state bureaucrats (Democrats) from imposing all sorts of demands on insurance companies like requiring that any policy sold in, say, Connecticut must include acupuncture, mole removal, foot massage and three hundred other needless procedures.

Pelosi’s Little Red Cor-VAT is nothing more than another usurpation of our freedom through trickery and deceit. We already are hemorrhaging jobs because America‘s corporate taxes are the second highest in the world. With Pelosi and her minions working feverishly every day to tie us all up into bigger and bigger fiscal knots under the guise of “compassion”, we can see that they want to take us into a land where there is no exit and no logic or simplicity to boot.

Please visit my website at www.nikitas3.com for more. You can print out for free my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.